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Financial summary

Financial highlights (adjusted)

(CHF in million) 2019 2018 2017
Revenue 385.1 393.3 403.7
Growth rate over previous year -2.1% -2.6% 12.1%
       
Gross Profit adjusted2) 175.1 177.9 184.8
Growth rate over previous year -1.6% -3.7% 10.1%
Gross Profit adjusted2) in % of revenue 45.5% 45.2% 45.8%
       
EBITDA1) adjusted2) 71.7 81.2 97.8
Growth rate over previous year -11.8% -16.9% 8.7%
EBITDA adjusted in % of revenue 18.6% 20.7% 24.2%
       
Operating Profit (EBIT) adjusted2) 43.1 60.4 78.0
Growth rate over previous year -28.7% -22.6% 11.8%
Operating Profit (EBIT) adjusted2) in % of revenue 11.2% 15.4% 19.3%
       
Net Profit before minority interest adjusted2) 32.0 48.2 61.5
Growth rate over previous year -33.5% -21.7% 13.3%
Net Profit adjusted2) in % of revenue 8.3% 12.2% 15.2%
       
Cash generated from operating activities 77.3 36.3 60.5
Growth rate over previous year 112.7% -39.9% -35.3%
in % of revenue 20.1% 9.2% 15.0%
       
Equity 351.5 348.9 318.5
in % of total assets 60.0% 63.1% 60.7%
Adjusted2) earnings per share 4.69 6.99 8.91

1) EBITDA (earnings before interest, taxes, depreciation and amortization) calculated by adding depreciation and amortization to profit from operations (EBIT), in each case determined in accordance with IFRS.
2) excl. share based payments, impacts based on IAS-19, amortization of intangible assets acquired and non-recurring expenses

Financial highlights (IFRS)

(CHF in million) 2019 2018 2017
Revenue 385.1 393.3 403.7
Growth rate over previous year -2.1% -2.6% 12.1%
       
Gross Profit 174.5 177.1 184.0
Growth rate over previous year -1.5% -3.7% 10.1%
Gross Profit in % of revenue 45.3% 45.0% 45.6%
       
EBITDA1) 65.2 71.6 87.4
Growth rate over previous year -8.9% -18.0% 6.9%
EBITDA in % of revenue 16.9% 18.2% 21.6%
       
Operating profit (EBIT) 22.1 48.3 65.1
Growth rate over previous year -54.3% -25.8% 10.3%
Operating profit (EBIT) in % of revenue 5.7% 12.3% 16.1%
       
Net Profit before minority interests 12.9 38.5 51.3
Growth rate over previous year -66.4 -24.9% 11.0%
Net Profit before minority interests in % of revenue 3.4% 9.8% 12.7%
       
Cash generated from operating activities 77.3 36.3 60.5
Growth rate over previous year 112.7% -39.9% -35.3%
in % of revenue 20.1% 9.2% 15.0%
       
Equity 351.5 348.9 318.5
in % of total assets 60.0% 63.1% 60.7%
Earnings per share 1.89 6.99 8.91

1) EBITDA (earnings before interest, taxes, depreciation and amortization) calculated by adding depreciation and amortization to profit from operations (EBIT), in each case determined in accordance with IFRS.

Revenue breakdown

u‑blox operates in two segments:

  • Positioning and wireless products
    u blox develops and sells chips and modules for positioning and wireless connectivity that are used in automotive, industrial and consumer applications. Revenue was CHF 385.0 million for 2019 as compared to CHF 393.0 million in 2018.
  • Wireless services
    u blox also offers wireless communication technology services in terms of reference designs and software. In 2019, revenue for wireless services was CHF 32.1 million compared to CHF 31.4 million in 2018 (including intra group revenue).

Consolidated income statement (adjusted)

  Jan-Dec 2019   Adjust-
ments2)
Jan-Dec 2019   Jan-Dec 2018  
(in CHF 000s) (IFRS) % revenue   (adjusted) % revenue (adjusted) % revenue
Revenue 385'099 100.0 385'099 100.0 393'269 100.0
Cost of sales -210'606 -54.7 584 -210'022 -54.5 -215'342 -54.8
Gross Profit 174'493 45.3 584 175.077 45.5 177'927 45.2
Distribution and marketing expenses -36'646 -9.5 1'454 -35'192 -9.1 -34'782 -8.8
Research and development expenses -96'253 -25.0 17'348 -78'905 -20.5 -67'818 -17.2
General and administrative expenses -23'272 -6.0 1'650 -21'622 -5.6 -18'744 -4.8
Other income 3'732 1.0   3'732 1.0% 3'818 1.0
Operating Profit (EBIT) 22'054 5.7 21'036 43'090 11.2 60'401 15.4
Finance income 547 0.1   547 0.1 5.305 1.3
Finance costs -4'133 -1.1   -4'133 -1.1 -2'158 -0.5
Share of profit of equity-accounted
investees, net of taxes
-4'249 -1.1   -4'249 -1.1 -3'339 -0.8
Profit before income tax (EBT) 14'219 3.7 21'036 35'255 9.2 60'209 15.3
Income tax expense -1'306 -0.3 -1'933 -3'238 -0.8 -12'039 -3.1
Net profit 12'913 3.4 19'104 32'017 8.3 48'170 12.2
Minority interests -149 0.0   -149 0.0    
Net profit, attributable to owners of the parent 13'062 3.4   32'166 8.4 48'170 12.2
Earnings per share in CHF 1.89   4.69   6.99  
Diluted earnings per share in CHF 1.89     4.69   6.96  
Operating Profit (EBIT) 22'054 5.7 21'036 43'090 11.2% 60'401 15.4
Depreciation and amortization 43'189 11.2 -14'589 28'600 7.4 20'844 5.3
EBITDA1) 65'243 16.9 6'447 71.690 18.6 81'245 20.7

1)Management calculates EBITDA (earnings before interest, taxes, depreciation and amortization) by adding back depreciation and amortization to operating profit (EBIT), in each case determined in accordance with IFRS.
2)Adjustments are impacts of share based payments, Pension calculation according to IAS-19, Non-recurring expenses, impairment and amortization of intangible assets acquired

In 2019 based on reporting by region, Asia Pacific generated 37.8%, EMEA 31.2% and the Americas 31.0% of total revenue. Revenue in Asia-Pacific grew by 4.5% to CHF 145.6 million. Due to the difficult macro-economic environment, revenue in EMEA declined by 5.6% to CHF 119.3 million and revenue in the Americas declined by 5.7% to CHF 119.2 million.

In 2019, approximately 80% of total revenue was generated by 108 customers. u blox's largest customer accounted for only 4.0% of revenue. u blox served over 7,200 customers and achieved global expansion into new regions and markets.

Gross profit

Adjusted gross profit decreased by 1.6% to CHF 175.1 million in 2019 from CHF 177.9 million in 2018. Gross profit adjusted margin was slightly more favorable at 45.5% for 2019 compared to 45.2% in 2018 due to favorable changes in product mix and reduced cost for licenses.

Distribution and marketing activities

Distribution and marketing expenses (adjusted) in 2019 were CHF 35.2 million as compared to CHF 34.8 million in the previous year. As a percentage of revenue, distribution and marketing expenses (adjusted) were 9.1% in 2019 compared to 8.8% in 2018.

Research and product development

Adjusted R&D expenses in 2019 were CHF 78.9 million as compared to CHF 67.8 million in 2018 due to increased amortization expense of capitalized projects entering the production phase and a lower overall capitalization rate of current projects. As a percentage of revenue, adjusted R&D expenses in 2019 were 20.5% as compared to 17.2% in 2018.

Share based payment

Share based payment expenses recognized according to IFRS in 2019 were CHF 5.3 million as compared to CHF 8.4 million in 2018.

Operating profit (EBIT)

Adjusted EBIT was CHF 43.1 million in 2019 as compared to CHF 60.4 million in 2018, a decline of 28.7%. Accordingly, adjusted EBIT margin was 11.2% in 2019 compared to 15.4% in 2018. Adjusted Operating Profit before depreciation and amortization was 71.7 million, a decline of 11.8% from 2018. The decline was primarily due to increased expense for R&D projects and further R&D investments into new products.

Finance income and costs

Adjusted finance income was CHF 0.5 million. Adjusted finance costs of CHF 4.1 million consisted primarily of interest payments for the two outstanding bonds and unrealized foreign currency losses. Share of profit of equity-accounted investees net of tax was CHF 4.2 million in 2019.

Net cash generated from operating activities

In 2019, u-blox generated cash from operating activities in the amount of CHF 77.3 million as compared to CHF 36.3 million in 2018, an increase of 112.7% compared to the previous year, due to better margins and a decrease in net working capital driven by lower inventories and trade accounts receivables, as well as the effects of changes in IFRS accounting standards.

Main investing activities

Investments in property, plant and equipment, and intangible assets amounted to CHF 56.9 million in 2019 compared to CHF 61.4 million in 2018. As a percentage of sales, the investment ratio decreased slightly to 14.8% in 2019 from 15.6% in 2018.

Despite the continued expansion of the R&D pipeline and the increased number of development projects across all product categories, capitalized development costs decreased slightly to CHF 50.0 million from CHF 53.8 million in 2018. There were no investments in intellectual property rights in 2019 or 2018. Investments in software amounted to CHF 0.4 million in 2019 compared to CHF 0.3 million in 2018. In 2019, investments in property, plant and equipment were CHF 6.5 million compared to CHF 7.3 million in 2018.

In 2019, 87.9% of total investments went into the development of new products compared to 87.6% in 2018. No investments were made into capacity expansion in 2019 or 2018.

Financing activities

In 2019 u-blox paid dividends of CHF 11.1 million and received proceeds of CHF 0.9 million from the issuance of ordinary shares in connection with its employee share option plan. The cash flow from financing activities also contains the effects of IFRS accounting standard changes.

Solid financial position

u-blox has a strong balance sheet with an equity ratio of 60.0%.

Cash and cash equivalents and marketable securities amounted to CHF 128.3 million on December 31, 2019, compared to CHF 137.7 million on December 31, 2018.

Goodwill increased due to the acquisition of the shares of Tashang and the assets of Rigado from CHF 55.2 million in 2018 to CHF 56.0 million or 9.6% of total assets in 2019.

On the basis of this strong financial position, the Board of Directors is proposing at the Annual General Meeting a payment in the form of a tax-free par value reduction. For this year a par value reduction of CHF 0.60 per share is proposed, which represents a payout ratio of 33.1% of consolidated Net Profit in line with previous years’ payout ratios.

Condensed consolidated statement of financial position

(in CHF 000s) At December 31, 2019 (audited) At December 31, 2018 (audited)
     
ASSETS    
Current assets    
Cash and cash equivalents 127'424 136'296
Marketable securities 898 1'401
Trade accounts receivables 48'469 60'802
Other assets 83'670 78'415
Total current assets 260'461 276'914
Non-current assets    
Property, plant and equipment 12'707 14'829
Right-of-use assets 21'824 0
Goodwill 56'027 55'231
Intangible assets 219'194 193'445
Financial assets (incl. equity accounted investees) 8'844 9'041
Deferred tax assets 6'886 3'570
Total non-current assets 325'482 276'116
Total assets 585'943 553'030
     
LIABILITIES AND EQUITY    
Current liabilities 61'431 55'476
Non-current liabilities 172'913 148'677
Total liabilities 234'344 204'153
Shareholders’ equity    
Share capital 109'569 6'390
Share premium 16'600 66'296
Retained earnings 225'295 276'191
Total equity, attributable to owners of the parent 351'464 348'877
Non-controlling interest 135 0
Total equity 351'599 348'877
Total liabilities and equity 585'943 553'030

 

Consolidated cash flow statement

(in CHF 000s) For the period ended December 31, 2019 For the period ended December 31, 2018
Net Profit 12'913 38'481
Depreciation & Amortization 43'189 23'356
Other non-cash transactions 5'263 9'814
Financial income & financial expense 7'835 192
Income tax expense 1'306 9'617
Change in networking capital and provision 16'186 -32'235
Income tax paid -9'401 -12'883
Net cash generated from operating activities 77'291 36'342
     
Net investment into property, plant and equipment -6'454 -7'312
Net investment into intangibles -50'446 -54'075
Net investments into financial assets 874 2'103
Acquisition of subsidiaries, net of cash acquired and participations -10'734 -4'107
Net cash used in investing activities -66'760 -63'391
Free Cash Flow (before acquisitions and participations) 21'265 -22'942
Free Cash Flow 10'531 -27'049
     
Proceeds from issuance of ordinary shares 876 15'286
Dividends paid to owners of the parent -11'077 -15'441
Payment of lease liabilities -4'996 0
Purchase of treasury shares 0 -7'609
Non-controlling interests 85  
Interest paid -2'544 -1'917
Net cash provided by / used in financing activities -17'656 -9'681
Net decrease in cash and cash equivalents -7'125 -36'730
     
Cash and cash equivalents at beginning of year 136'296 169'624
Exchange gains/(losses) on cash and cash equivalents -1'747 -3'402
Cash and cash equivalents at end of the period 127'424 136'296